G.U.D. Holdings undertook significant inventory build in the first half in a bid to navigate supply chain constraints, with inventories up $41m half-on-half and largely offsetting any earnings beat as noted by UBS.
While strong performance from the automotive segment drove a 5% beat on group first half earnings UBS expects the company will be impacted by headwinds and increased costs in the fourth quarter but company guidance was retained.
The Buy rating is retained and the target price increases to $14.40 from $13.80.
Sector: Consumer Durables & Apparel.
Target price is $14.40.Current Price is $12.94. Difference: $1.46 – (brackets indicate current price is over target). If GUD meets the UBS target it will return approximately 10% (excluding dividends, fees and charges – negative figures indicate an expected loss).
